Understanding Asia Fashion Holdings Limited’s (SGX:BQI) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Asia Fashion Holdings is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. Check out our latest analysis for Asia Fashion Holdings

Did BQI’s recent earnings growth beat the long-term trend and the industry?

For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This method allows me to analyze different companies on a more comparable basis, using the most relevant data points. For Asia Fashion Holdings, its most recent earnings (trailing twelve month) is -CN¥6.71M, which compared to the prior year’s figure, has become less negative. Since these figures may be fairly nearsighted, I have determined an annualized five-year figure for Asia Fashion Holdings’s net income, which stands at -CN¥16.29M. This means although net income is negative, it has become less negative over the years.

We can further evaluate Asia Fashion Holdings’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Asia Fashion Holdings has seen an annual decline in revenue of -34.08%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Inspecting growth from a sector-level, the SG retail distributors industry has been growing average earnings growth of 87.54% over the past twelve months, . This is a a solid change from a volatile drop of -18.86% in the previous few years. This suggests that whatever tailwind the industry is enjoying, Asia Fashion Holdings has not been able to reap as much as its industry peers.

What does this mean?

While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to forecast what will happen in the future and when. The most useful step is to assess company-specific issues Asia Fashion Holdings may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Asia Fashion Holdings to get a better picture of the stock by looking at: